Nomura International Plc v Banca Monte Dei Paschi Di Siena SpA

For the purposes of Article 28(3) of the Judgments Regulation, related actions are assessed by asking whether, in principle, it is genuinely desirable to hear them together to avoid inconsistent judgments. The existence of an exclusive jurisdiction clause in favour of the court second seised does not, of itself, prevent the proceedings being related. The assessment must consider the claims and likely defences and adopt a broad, common-sense approach to the degree of factual and legal connection.

In exercising the Article 28(1) discretion, the applicant bears the burden of persuasion. Relevant factors include relatedness, the stage and likely duration of the proceedings, proximity to the subject matter, and the parties’ jurisdiction bargain. An exclusive English jurisdiction clause was a powerful reason to refuse a stay.

Nomura brought English proceedings seeking declarations concerning the validity, binding effect and enforceability of agreements forming part of a financial restructuring with BMPS. BMPS had earlier commenced Italian proceedings against Nomura and former BMPS directors, alleging tortious liability arising from the restructuring and reserving its position on the agreements’ validity.

BMPS applied under Article 28(2) of the Judgments Regulation for the English court to decline jurisdiction and alternatively sought a stay under Article 28(1). The Article 28(2) application was abandoned. The issues were whether the English and Italian proceedings were related actions under Article 28(3), and, if so, whether a stay should be granted.

1. Related actions. The Article 28(3) inquiry focuses on whether it is genuinely desirable in principle for the actions to be heard and determined together to avoid inconsistent judgments. It is not confined to whether the actions are technically capable of being tried together in the court first seised. An exclusive jurisdiction clause in favour of the court second seised does not by itself prevent proceedings from being related.
2. The inquiry must consider the claims and likely defences. BMPS had indicated that, if the English proceedings continued, it was likely to oppose the declarations and rely on the factual matters pleaded in Italy. Applying the broad common-sense approach in Sarrio SA v Kuwait Investment Authority [1999] 1 AC 32, the underlying factual overlap created a very substantial connection. The proceedings were therefore related actions within Article 28(3).
3. Discretion to stay. The burden of proof or persuasion lay on BMPS. Relevant considerations included the extent of relatedness and the risk of inconsistent judgments, the stage and likely duration of each proceeding, and the proximity or convenience of the courts. Those factors were not exhaustive.
4. The proceedings in Italy were likely to take longer, and the validity of the agreements would still require determination after the Italian proceedings because that issue was not before the Italian court. These matters pointed against a stay. Although witnesses and documents were likely to be in Italy and Italian-law issues arose, convenience was finely balanced.
5. The exclusive jurisdiction clause in the ISDA Master Agreement was a very significant factor. The court should, so far as possible, give effect to the parties’ bargain and should be very slow to stay proceedings brought in the contractually selected forum. The related waivers of objections to venue, forum inconvenience and jurisdiction reinforced that conclusion.
6. Because the English proceedings would continue in relation to the ISDA Master Agreement and the Asset Swap Transactions, it was also expedient for the English court to determine issues concerning the remaining agreements, to which the same alleged illegality case applied. BMPS’s application was rejected and no stay was ordered. Consequential matters, including costs, were left for an agreed order or further determination.